Mortgage Rates Trying to Find a Ceiling

By: Matthew Graham •

Mortgage rates were decidedly higher this morning, with most lenders back above last week's highs.  At the time, those were the highest rates in more than a month, although the range has been relatively narrow.  Underlying bond markets improved throughout the day, however, resulting in a fair amount of lenders revising rate sheets for the better.  After those revisions, rates are pretty close to yesterday's levels.

One thing's for sure: the average lender is still definitively higher compared to last Friday's rates.  Keep that in mind if you encounter one of the many news stories citing "unchanged" week-over-week rates from Freddie Mac's Survey (which, as you may have guessed, can run a bit behind more up-to-the-minute changes).

From a strategy standpoint, today's resilience is a welcome sight, but the safest bet is to remain defensive until we see more evidence of a bounce.  For now, the trend remains negative and today was an exception.

 See Rates from Lenders in Your Area


Loan Originator Perspective

Bonds caught a bit of a month-end/dead cat bounce today, wandering between slight losses and gains.  Many lenders repriced better mid-day, but at best pricing mirrored Wednesday's.  I still think markets are giving tax reform's growth potential far too much credence, but clearly my opinion doesn't matter.  Until I see an uptrend, I'd going defensive, and locking loans early in the process.  -Ted Rood, Senior Originator


Today's Most Prevalent Rates

  • 30YR FIXED - 3.875-4.0%
  • FHA/VA - 3.5% 
  • 15 YEAR FIXED - 3.25%
  • 5 YEAR ARMS -  2.75 - 3.25% depending on the lender


Ongoing Lock/Float Considerations

  • 2017 has proven to be a relatively good year for mortgage rates despite widespread expectations for a stronger push higher after the presidential election in late 2016.  Most of the rate spike was done by the end of 2016 and we've generally moved sideways to lower since then

  •  The biggest question is whether or not this counter-intuitive trend has an expiration date.  Rates haven't been immune from brief corrections back toward higher levels, and each correction causes concern that the good times are over.

  • Despite those concerns, we've seen rates make new lows in April, June, and September.  Although rates have been rising since early September, they'd have to move even higher before we'd consider a change in the bigger picture theme.

  • All of the above having been said, past precedent suggests we're due for a much bigger dose of volatility some time soon.  
  • Rates discussed refer to the most frequently-quoted, conforming, conventional 30yr fixed rate for top tier borrowers among average to well-priced lenders.  The rates generally assume little-to-no origination or discount except as noted when applicable.  Rates appearing on this page are "effective rates" that take day-to-day changes in upfront costs into consideration.